Exercise 4-17. Operating Leverage [LO 4, 5]
Refer to the in Exercise 4-16.(Round all decimals answers to 4 places and dollar answers to the nearest dollar.)
Required
a. Calculate profit as a percent of sales in the prior year.
b. Suppose sales in the current year increase by 15 percent. Calculate profit as a percent of
Sales for the new level of sales and explain why the percent is greater than the one calculated in part a.
Solution: Computation for the Profit Margin

Please see reference below. And please show all calculations.

Exercise 4-16. Multiproduct, Contribution Margin Ratio [LO 4] (Using Only the Data)

Wilde Home & Garden is organized into three departments. The following sales and

cost data are available for the prior year:

Particulars	Dept A	Dept B	Dept C	Total
Sales	$450,000	$600,000	$750,000	$1,800,000
Less: Variable cost	$270,000	$450,000	$450,000	$1,170,000
Contribution Margin	$180,000	$150,000	$300,000	$630,000
Less: Fixed Cost	$70,000	$90,000	$100,000	$260,000
Profit	$110,000	$60,000	$200,000	$370,000